Prime Minister Imran Khan faces a number of impediments, which are marring policy formation of his government. While there are no reasons to doubt his integrity and love for Pakistan and Pakistanis, two factors just do not allow him and his team to come up with home grown plan. These are: 1) his speeches spread over more than two decades, as opposition leader and 2) lack of capacity of his team. Ironically, he has offended opposition parties to an extent that these are not even ready to support him on policies necessary for nation building and putting the country on growth trajectory. Over the last two decades he has been the biggest opponent of: 1) borrowing from IMF, 2) process of privatization, 3) policies governing economy of the country and above all 4) bureaucratic and judicial systems of the country.
Since independence economic policies of Pakistan have been driven by the foreign policy agenda of the United States. This includes financial support by multilateral lenders, directly or indirectly controlled by the super power. A lot of grants, multilateral and bilateral funding came to Pakistan because it was a part of cold war strategies, resistance against Russia (former USSR) in Afghanistan and war against terrorism. The history also shows that nature of relationship kept on changing with the passage of time but financial support continued. This inculcated a bad habit among the policy planners; their source of inspiration of guidance was the multilateral lenders rather than home grown plans. Despite doing a lot it has to hear do more mantra.
Funds extended through multilateral agencies were too small when compared with amounts spent daily in proxy wars in Afghanistan. Towing the US foreign policy agenda often annoyed Pakistan’s three immediate neighbors – Afghanistan, India and Iran as well as two other global super powers – China and Russia. After 9/11 geopolitical situation has become even more complicated due to emergence of regional super powers, development of terrorist networks and shift in foreign policy agenda of China and Russia. This can be best understood by reading the tale of two ports Gwadar and Chabahar. Construction of Chabahar was aimed at undermining the importance of Pakistan, to develop an alternative route. India played a key role in the construction of this port, despite imposition of economic sanctions on Iran by the United States. Therefore, it may not be wrong to say that flow of funds to Pakistan has been driven by the geopolitical reasons rather than any love for its people.
It is often said that since half of Khan’s cabinet comprises of the wizkids of General Pervez Musharraf team, maintaining cordial relationship should have not been a problem. Ironically, the prevailing geopolitical situation is very different from that of Musharraf era. Therefore, the same team has not been able to solicit bigger favors from the United States. One can recall that there were economic sanctions on Pakistan, but after 9/11 United States removed many restrictions to achieve its foreign policy agenda. A question arises, why the US is not willing to extend similar favors to Pakistan? One of the reasons could be the US plan to withdraw its troops from Afghanistan and the Middle East due to declining importance of the oil producing countries of the Gulf region. The current focus of the US administration is on change of regime in Venezuela and South China Sea. That is the reason IMF is too concerned about Pakistan paying China from the money received from IMF.
It is not a cliché but fact that the incumbent government has not been able to address some of the key issues, top of the agenda items being: 1) negotiating deal with IMF, 2) accelerating GDP growth rate, 3) boosting exports, 4) containing inflation and above all 5) bridging confidence deficit. The net outcome of these failures is: 1) declining GDP growth rate, 2) mounting external borrowing, 3) depreciating rupee and 4) rising interest rate. In fact most of these outcomes are of the failure to negotiate a deal with IMF. Due to plunging capital market foreign investors are offloading their investment and repatriating funds, another reason for erosion in foreign exchange reserves of the country.
While in opposition, Imran Khan was opponent of privatization, not ready to sell family silver, but have now initiated the process half-heatedly. At present PPP is also opposing privatization, though it has done privatization due the eras of Benazir Bhutto. Though, some of the Arab countries are depositing foreign exchange with State Bank of Pakistan, experts still believe that Pakistan should finalize deal with IMF, as it has already met many of the IMF conditions that include hike in interest rate, withdrawal of subsidies and rise in electricity and gas tariffs.
According to one of economic analysts who prefer to remain anonymous, “Over the last two decades Imran Khan has virtually opposed many policies of the governments, from borrowing from IMF to privatization. Now he finds it extremely painful to do the same. Therefore, he is deferring decision making, which are landing him in greater problems. Since he is often accused for taking ‘U’ turns, he can opt for the policies in past. Ironically, he may not like making decisions, but he is forced by external and internal dynamics to opt many things he does not like.”